Developers sales in February are still tepid. They’re down by nearly half because of the lack new condo launches
In February, 183 ECs and other units were sold. In January, there were 929 launched units and 588 sold.
The main reason for the drop is the absence of large non-landed developments in the last month. Just 45 units have been launched, which is nearly 10x less than last month’s 417. Many buyers tend to travel during CNY, so it’s not the ideal time to launch new projects.
This is also different from previous property booms where developers rushed to release their residential projects just a couple of weeks after CNY. The fact that there were no launches last month is a sign that developers will wait until the perfect time to release new developments. The lackluster sales performance in 2018 so far is not unlike previous years.
The new home sales in 2023 had dropped to their lowest level for 15 years, at 6,421 units. That’s a decrease of 9,6 per cent over the 7,099 unit figure from 2022. This followed repeated rounds of cooling, a softening in the economy and higher interest rates. In light of the many new options available, increased buyer fatigue, and increased resistance to high-priced products, buyers have become more selective.
Most sales came from previous projects, as there were none in February. This includes the 512 units Lumina Grand EC at Bukit Batok which was launched in January. The project was the top-selling development in February. 16 units at a price median of S$1,497/sqft were sold.
New home sales in Singapore continue to fall as developers delay launches due to the Chinese New Year celebrations.
Analysts claim that the true buying sentiment will emerge in March when major launches start to roll out.
According to data released Friday (15 March) by the Urban Redevelopment Authority, developers sold 149 units of private housing in February. This was 47 percent less than January’s 281 homes.
The monthly figure is approximately a third of February’s 433 sales, excluding Executive Condominiums (ECs).
Developers sold just 174 units in February 2008.
The Botany project in Dairy Farm was the best-selling project excluding ECs. 15 units were sold at a price median of S$2,018 psf.
Locals were the main buyers of 14 units, and one unit was purchased a Singapore permanent residence.
There were only three homes bought by foreign buyers during February. It is the lowest monthly number of foreign homebuyers ever since the Additional Buyers Stamp Duty rate (ABSD for them) was doubled.
Despite paying the high ABSD of 60 per cent, buyers still value their purchases. Terra Hill, located in Rest of Central Region (RCR), was sold for S$8.05m. The buyer paid S$4m ABSD.
URA’s statistics also showed that condo and private apartments sales were pretty evenly distributed across the three segments of the market last month.
In the Outside Central Region, 58 units were sold. This represents 38.9% of all sales. Core Central Region sales accounted for 22.1 percent of total new sales. In February, median unit prices in all three areas fell.
Wong reported that the median CCR price had declined by 3% in February, mainly because of the lower volume and higher base from the month prior. Prices fell by 0.5% in the RCR, and 1.5% in the OCR during February.
The sales are tepid, but analysts predict that in March momentum will increase with the launch of some major projects.
The Lentor Hills estate includes two such buildings – Lentor Mansion with 533 units and Lentoria with 267 units.
Lentoria’s launch weekend, in March, saw 50 units sold. This should boost sales on the primary markets. Lentor Mansion will be released for bookings in March. The preview attracted positive feedback and we expect a good response from buyers.
Comparing the performance of the market in March to that of February can provide a more accurate picture of buyer’s sentiment, because it is a short month and there are fewer launches.
Overall, 7,000 – 8,000 new houses could be sold between 2024 and 2025. This is a slight improvement over the previous year when 6,421 new homes were sold, but still well below the five-year mean of 9,288.
The near-term impact of macroeconomic conditions that are not encouraging, cooling measures taken and rising interest rates will likely continue. But, in H2 2020, this could change if rates start to fall and if the economy starts to improve.
